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As COVID-19 continues to keep Canada under strict restrictions and partial lockdowns, many businesses have been struggling to keep afloat. In an effort to help these businesses the Government of Canada introduced the Canada Emergency Business Account (CEBA). Through it, businesses were able to access interest-free loans up to $40,000. Since it’s launch in April of 2020, more than 795,00 businesses have been approved for the CEBA loan, which amounts to almost $31.80 billion in funding. 

Changes to The CEBA

The CEBA loans were meant to help businesses affected by COVID-19, with non-deferrable expenses such as rent, utilities, insurance, payroll, and property taxes. However, due to the prolonged presence and restrictions of COVID-19, businesses are still struggling to survive. As a result, the Government of Canada has increased the CEBA loan amount by another $20,000. This means businesses can now access up to $60,000 of interest-free funds. Those eligible may apply for the CEBA loan until June 30, 2021.

Who Can Apply For the CEBA Loan Extension? 

The requirements to qualify for the CEBA loan remain unchanged. In order to be eligible, businesses must have:

  • A CRA business number that was registered by March 01, 2020.
  • Meet the minimum payroll expenses between $20,000 and $1.5 million or demonstrate a minimum of $40,000 in eligible non-deferrable expense. 
  • Must have filed a tax return in 2018/2019.

Ineligible Businesses

However, if your business falls under any of these categories, you will not be able to take advantage of the CEBA.

  • Your business promotes ideas that are contrary to Canadian law such as violence or discrimination.
  • Your business is owned by any Federal Member of Parliament or Senator.
  • Your business is a government organization/body/entity (part or wholly-owned). 

Learn more about COVID-19 government assistance for Canadian businesses.

How Do You Apply For The CEBA Extension? 

Businesses who’ve previously received the CEBA loan must apply for the $20,000 CEBA extension with the same financial institution. Those who’ve never applied for the CEBA before can apply with their business’s primary financial institution. 

In order to apply, you’ll need:

It is important to note that the $20,000 may not be available amongst all participating financial institutions. In such cases, you’ll have to wait till it becomes available to apply. 

Paying Back The $20,000 CEBA Extension

Businesses who pay back the loan by December 31, 2022, will have part of their loan forgiven. With the $20,000 extension, businesses can now be forgiven for up to $20,000 or 33% of their loan. The first 40,000 borrowed is eligible for a 25% loan forgiveness and the remaining $20,000 is eligible for 50%. Businesses who are unable to pay back the loan amount by December 31, 2022, will then be charged 5% per annum interest until December 31, 2025, when the full principal is due. 

Frequently Asked Questions

Who can access the $20,000 CEBA extension?

The requirements for the additional $20,000 is the same as the original requirements for the CEBA. Businesses must have an active CRA Business Number, business chequing/operating account, and meet the minimum payroll expenses ($20,000 and $1.5 million) or non-deferrable expenses ($40,000). 

When can I apply for the $20,000 CEBA extension?

Businesses eligible for the CEBA must apply by June 30, 2021, in order to be considered for the CEBA loan.

Can I qualify for more than $20,000 through the CEBA?

Those who’ve previously received the $40,000 CEBA loan, will only be eligible to receive an additional $20,000. However, businesses that have not previously received the $40,000 CEBA loan, can apply for the full $60,000. 

How much of my $20,000 CEBA loan will be forgiven? 

Businesses can have up to 25% of their loan forgiven on the first 40,000 borrowed and 50% on the next $20,000. Businesses who repay their balance of the loan by December 31, 2022, will have a maximum of 33% of their loan forgiven. This results in $20,000 if you apply for the full $60,000. 

How long will it take to receive my CEBA Loan? 

After you’ve applied and provided all the documents required, you can expect to receive your funding in 10-15 business days, if your pre-funding eligibility is approved.

Bottom Line

2020 has been a financially difficult year for many Canadians. Many businesses both big and small have already closed due to the impact of COVID-19. In fact, according to Statistic Canada, in April of 2020, 88,187 businesses closed. Thankfully, the Government of Canada has provided financial relief through programs like the CEBA. If your revenue is down due to COVID-19, try applying for the CEBA.

Priyanka Correia, BComm avatar on Loans Canada
Priyanka Correia, BComm

Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

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